Does Capitalism always Give us More from Less?

Recently I listened to a podcast interview with Andrew McAfee who has written a book called More from Less. The message of this book is meant to be positive along the line of Steven Pinker’s more recent books. Illustrating that things aren’t maybe as bad as they seem, or at the very least we have reason to hope. While I am reticent to make critiques of a thesis without having actually read the book, what I want to say is more about the foundational premises he builds his book on, and I think the 90 minute interview gives me a good basis for discussion here.

For those of you who don’t want to listen, I will give a brief summary here. I will say at the outset that he is very pro capitalism, but I’ll be honest, out of anybody in favor of capitalism that I’ve listened to, he makes the most compelling arguments. I should also point out that he is not anti-regulation, nor is he libertarian and thinks that capitalism can solve every human concern. Anyway, the basic thesis of his book is that we currently live in an age where human prosperity shows signs of decoupling from the nearly one to one correlation we had since the industrial revolution of natural resource use. With quite a lot of data he shows since the 1970s we’ve been continue to grow economically, while using resources at a continually slower rate. The reason he attributes to this transition is because of our improved technology along with the fundamental ways in which capitalism works. I’ll go into details in a moment. I want to preface the discussion also by saying that he is not anti-climate change or anti-EPA. He admits the dark past of capitalism, but feels that the coupling with technological advances has helped capitalism be a more positive force. Like many of us I guess, he sees the good parts, and doesn’t want to throw the baby out in the bathwater. I always resonate with this mentality, and for those who know me, know I am not completely anti-capitalism. I do also see some good parts, but there are also parts that are deeply troubling to me and so a mixed economy seems the most reasonable to me.

The technological save for mankind her argues is the computer. This is not a new idea, and in fact I wrote about this a little before on my blog when I talked about Douglas Adams’ ages of sand. After the lens for the telescope and the microscope opened up the macro and micro universe, the silicon chip came along and revealed to us the process. We could do enormous amounts of calculations so quickly that this allowed people to solve problems in a tiny fraction of the time it would have taken them before. McAfee gives several examples of how computers helped businesses and corporations reduce waste. Their motivation to reduce waste is of course motivated by profit, but as a result less resources were used. One example was the aluminum can. If you are my age or older you know how thick cans of soda used to be compared to now. Cans today still function perfectly but use less material. Being able to model pressurized liquids in cans and tweak thicknesses and model the impact of that thickness allowed for vast savings in resources used by beer and soda companies. Since companies need profit for growth they have no incentive to be wasteful when it comes to materials. Now I’m sure class action law suits also convinced companies to stop raping the Earth, but I take his point and I don’t deny that it’s true.

His pro-capitalism stance is largely based on the fact that so many private companies and innovative production methods and the advent of fossil fuels raised a large amount of people out of poverty. Life expectancy when up dramatically as infant mortality dropped significantly due to indoor plumbing and parts could be made more quickly and in massively higher amounts to give a large population of people access. Being able to unleash the energy stored in fossil fuels powered companies of all kinds to bring lifesaving and life altering technologies to more and more people. Populations exploded as a result of the increase in prosperity.

For McAfee the future, if we are going to have a better one, he argues that we must have more of the same. We must have continue to have capitalism working to develop technologies that will use less and less resources for creating growth, and this can be guided by smart government policy. He is in favor for instance of a revenue neutral carbon tax that gives money to people at the bottom end, and encourages corporations and businesses to work to cut fossil fuel usage. What he doesn’t advocate is that we are all going to return to some idyllic pre-industrial state and he argues, I think quite convincingly that we weren’t this idyllic sustainable group of people prior to the industrial revolution, and that now with the world population as it is, we need energy and only the development of better energy sources is going to help us deal with something like pollution and climate change.

So fundamentally I think my disagreements come from the fact that first even if we are using less resources, those resources are still finite, and if we aren’t concerned about the continuing growth of people we will simply run out of important resources we need. Is there always a technological solution out there waiting for us? Maybe, but we don’t know that for sure.

The second thing I question is whether or not it is good that the population exploded as it did in the last 100 or so years. Is this prosperity? Is this a good way to measure prosperity? The fact that we might have the ability to effectively support human beings, doesn’t mean that we necessarily should. It seems to me that the technological advances of the industrial revolution were so powerful that human population grew unrestrained, requiring the continuing need to use and extract more resources. Is it true that we might not have invented the computer if we grew human populations at a rate that lead to a more sustainable society? Are these technological advances only an answer to some threshold in the amount of suffering on the planet? Was the computer something that could not just as easily been invented with half the world population at the time or was there a drive to invent something that could solve innumerable problems that were occurring because the world population was as high as it was? It’s not obvious to me that this is the case. It’s not obvious to me that prosperity for a creature with such a high level of consciousness should simply be defined by our growth in population. If we continue to grow in population this just seems to put us in an endless cycle of trying to have to develop new technologies to alleviate the suffering of the increased population. And even if we are getting more out of less, eventually something will run out, and technology simply won’t save us.

Finally, I am left with the old moral philosophy question: Does the end justify the means? Let’s say capitalism was best equipped to increase human prosperity and not destroy the Earth at the same time. If we are using less and less resources because some CEO is trying to make more money does it matter that we are doing the right thing for the wrong reasons? Capitalism is not a moral philosophy it is just an economic system. And while I enjoy listening to this well-educated author, his optimism, and his well laid out arguments, he is in the minority it seems when it comes to those who celebrate capitalism. For many the mindset of growth trumps other human concerns, even if that mindset sometimes producing good ends, it often leads to many downstream problems. There has to be room for human rights, happiness, respect, empathy, etc. If it is possible to practice a brand of ethical capitalism it must look different than what we have had in the past and even what we have now. I see very few capitalists adopting McAfee’s views, and I find myself very concerned about a society that puts profit in front of all other values. If capitalism does have any intrinsic value in it, then it needs a better marketer than Wall Street, and banks, and mega-rich billionaire CEOs.

McAfee does admit that income inequality is an important issue, although in the interview offered very little solutions to that. I suspect he feels like there policy solutions that don’t involve a high redistribution of wealth, but he didn’t go into a lot of details. There are a myriad of other issues he didn’t address in the interview such as education, and health care which I think don’t lend themselves well to the capitalist economic model yet are important in a society.

He did also address the problem of growing economies in other parts of the world. He doesn’t worry as much that they will do things as “dirty” and irresponsible as we did, simply because new technologies are available to them at a cheaper price than what the U.S. had when our economy started growing rapidly. It’s a fair point. But even if we can use less of resource A to produce a 1 KW of energy, or 1 mile of fiber optic cable, with a lot more people wanting those resources it still seems like an issue. And if we are expecting technology to get us out of our biggest problems while also devaluing education, as seems to be the case in this country, I don’t see things as getting better quickly enough before we hit the wall.

Overall it was a thought provoking interview. I don’t know if I feel more optimistic, but I at least can acknowledge that the conversation about what we can do is broader than the conversation we are having now. On the topic of climate change I feel this is largely because our conservative, pro-capitalist party can’t even admit that we have a problem and this leads to a very narrow range of solutions.

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30 thoughts on “Does Capitalism always Give us More from Less?”

The problem with dismissing capitalism would be that there’s nothing better to substitute it with. I think the underlying issue that people can’t come to terms with is there’s a fairly drastic price for everything. Cheap products, which everyone wants, require either very cheap labour or automation, which in turn means a reduction of employment numbers. However you lay out a model, there are losers.

I do think there are always losers in any change, but at least for now there are ways to give those losers an opportunity to succeed if they are willing to re-educate and re-train. That’s where low cost education and vocational programs are essential and those types of things are part of a social safety net which I think is essential to a society in which technology rapidly changes.

Part of the reason why I hang on to capitalism as useful is because I agree that it’s not clear what would replace it as a force to move things forward. I think it’s a fair view by the author and by other supporters of capitalism that capitalism abhors inefficiency. However as good as it is on the math, it’s bad on the human values end of things. Which is kind of why I like socialism because I feel like it, at least in theory, it promotes more humanist values. Problem is that it isn’t very clear on the math. lol This is why I tend to support some mixture of the two.

At least people like Chris Hedges and Paul Mason are laying out ideas for discussion. The problem, as Hedges sees it, is that the power-holders have all the main levers on their side: the media, the financial industry, the corporations, educational institutions, and most importantly, the military. And guess what, if they are threatened with (what they would deem) usurpation, then out come the guns and tanks.

The concerns you raise here are troubling to say the least, and you have succinctly put into to words my concerns about capitalism which when taken together are worrying in the way that all these things line up against the people. It seems that with the media and social media they are even controlling the conversation. It’s one the reasons I realized how fruitless having conversations on social media was.

No need to be sorry. You simply told me something I already knew but just didn’t know that I knew it. 🙂

I am watching the video now. I have to say that the connection to war isn’t something that I thought of but makes perfect sense. To fight in a war, unfettered capitalism is the most efficient way to win the war. To get people to let themselves be drafted, sent overseas, and make great sacrifices at home and abroad to support the war effort one must change the thinking of an entire nation. Enter propaganda. Unfettered capitalism also develops the communication technology you need to be able to do that quickly.

In many ways it feels like the move the Matrix was maybe more of a metaphor for life today, because it feels like we are being sold a version of reality, and our acceptance of it, is what makes us believe that this is how it’s all supposed to be. In this way, the mass marketing is almost the most important evil we face because it’s what is preventing us from even seeing we even have other options. The fact that we can communicate globally also lets us spread the message that something is wrong with the reality we are being sold far and wide, but as you say, when you don’t own the means of communication, the odds are against you. Somehow we have to find away to change things, while living in this reality that’s sold to us. Not an easy thing to do. Especially with so many humans having an authoritarian mindset. Perhaps this is why religious fundamentalists are so easily convinced to follow the lead of people with money and power.

The weird thing about Christianity in particular is that it’s star was somebody who led people out from under oppression, and today’s brand of Christianity seems to be more about subservience. Which might be worthwhile if the person you are being subservient to is a good person, but many seem unable to tell their false prophets from the real ones.

I also find it odd that I think many people to sort of know that the ultra rich are screwing them over, which as the documentary pointed out at the beginning, the fact that we’re now electing big business to office is extra odd. I will never really understand the appeal to Trump, even while I recognize that so many people have been screwed over by politicians. If the establishment is corrupt, voting in the source of corruption makes no sense.

Thank you Swarn, all agreed, all spot on. Bear in mind that video is 6 years old and the book it was derived from, Death of the Liberal Class, 9 years old. So since then: Trump and all he represents, and as envisaged in the book/video.

I’m absolutely certain he does. And of course, he inevitably will be wrong in some respects or to some degree. But anyone with their eyes open can see the way things are headed, and the book has proved prescient thus far.

This was an excellent read Swarn. Thank you for what I see as a well-rounded, equitable evaluation of Andrew McAfee’s interview intertwined with subjects in his new book. I knew I was going to like reading your post when you also mentioned Steven Pinker’s recent works of which I’m basically familiar, on say a level of bullet-points. I do like to read what McAfee has to say not only because of his educational background—near impeccable, huh?—but for exactly the same reasons you pointed out: his broad-brushed, well researched work on some of today’s critical and controversial subjects. I would definitely want him on MY committee of Improving America’s Socioeconomic Problems by 2030! 😉

On the topic of climate change I feel this is largely because our conservative, pro-capitalist party can’t even admit that we have a problem and this leads to a very narrow range of solutions.

Couldn’t agree more Swarn. Those who you are referring to won’t get it in their opulent skulls until their pocket-books, bank accounts, and/or worse, their own immediate family is affected in horrible ways, possibly death/killed. Then they’ll wake up from their delusional stupor, self-absorbed Ivory Tower communities and 24/7 pleasant activities and be SHOCKED as to how this could’ve happened!!! I just hope that when it does happen—because of incessant obsessions with ‘business as usual’—it won’t be too late. Mother nature has a very nasty temper when she blows and she won’t care one iota what or whom fall in her wake. 😦

After reading Hariod’s poignant comment I think that we also have to face the fact that there is also no real liberal media, just a media that is centered on making the cash as corporate entities tend to do. What’s interesting is that in terms of manufacturing goods, McAfee might have a point that there is this drive to use less to do more. But for corporate media what this means is to make more money they provide less facts and more spin to keep people divided, emotional, and shouting instead of conversation. Our politicians are playing the same game for the most part. Even if they were to have longer more nuanced response, we live in a world of sound bites. It’s all extremely frustrating.

I have this odd feeling that the resources of the earth for the ancient technologies have been depleted before. Since that is only a hunch, I’ll go with this hunch. We’ve built a system now that is not going to be dependent on the materials we are familiar with, eg; fossil fuels and hydroelectric power changing ecosystems, but as we advance and use less, well also advance and use different resources from sources we’ve never even considered valuable yet. I have not bought into the end is near and well all kill ourselves off, mainly because innovation is so incredibly broad and good ideas are coming to light at very high speeds. I guess I have faith in science and innovation, as long as we don’t bomb ourselves to death over some cheap propaganda.

We certainly have run out of resources before at least locally and with no good way to move resources long distances. And you’re right that the value of any particular resource has changed over our history.

I do tend to put a lot of faith in our ability to innovate, to be honest that’s about the only way to be optimistic about our future. lol But I think climate change is still our big test as it is a global problem and one that will become so bad downstream the technology we’d need to combat it would be unlike anything we’ve invented before because it would need to essentially make global changes in a much faster time scale than it took for those global changes to build up. Not saying it’s impossible, but I’m convinced that it’s a problem we need to start working on more seriously, even if it does mean that we are investing into a future we won’t be around to see.

V. interesting post, Swarn. It’s reminded me of a quote I came across recently: ‘A ruling caste always remains slightly barbaric’ Robert Musil, Austrian polymath (1880-1942). I think he might amend that these days to totally barbaric. In the UK and US the upshot of current ruling regimes is massive poverty and a growing divide between rich and poor – all laid out quite plainly in recent UN reports on both our nations by Philip Alston (International Lawyer) Rapporteur on Extreme Poverty and Human Rights. This is the UK summary which came out last autumn, to be met by government inaction and then swallowed by Brexit:

It points out that the UK is the world’s fifth richest nation, yet 14 million live in poverty. The ruling caste has the poor believing it is all their own fault, and the rest of us feeling virtuous (doing our bit) if we contribute to food banks. In the meantime for purposes of the geopolitcal control of the rest of the world, insane amounts of national resources are exploded over defenceless populations across the Middle East. Yemen for instance. Elsewhere, e.g. in Africa Joint US/UK/French bombing campaigns reduced Africa’s most prosperous and financially equitable nation, Libya, to a brigand state. So yes, we may have the technology, but what do we mostly use it for?

Thank you for the comment Tish. I think part of McAfee’s argument would be that the technology is at the very least decreasing the amount of resource extraction and human suffering that might exist otherwise and I think his book tries to demonstrate this. Income inequality globally has actually gotten better, but in some countries like the U.S. and UK it has indeed gotten worse and he admits this is a problem. Like I argued here, I think that comparing things in a relative way to now and in the past doesn’t matter a whole lot if we are let’s say using an entire nation for their supply of some resource. Perhaps if we didn’t have nation states we could look at the world’s resources as a whole, but while we do still have natnion states we definitely have to be cognizant of how we are exploiting countries. It also worries me that despite some nations pulling themselves out of their poverty there also seems to be a desire among richer countries that some countries always remain losers because of the resources they can exploit. And it seems that this might be their attitude regardless of what level of capitalism they support.

yes, it’s the need of nations to control other nations’ resources – and at any cost while most of us at home, receiving some of the trickle-down pillage benefits know little or nothing about it – is what bothers me. DRCongo got regime-changed by the CIA in the 1960s – the nightmare in that nation just goes on and on – this probably one of the most resource-rich most poverty stricken, war-ridden nations on earth. We need their coltan and related minerals to run our technology. Before that it was their copper. We also like their gold and diamonds, timber and (upcoming) their oil.

Mostly nations are artificial constructs that provide tribal moralism, wich is used by the priviledged to hold on to their priviledges and to compete in their mutual social competition. The rich are not loyal to the nations, from wich they demand loyalty in order to use their resources – as such or as means to gain the resources of a nother nation.

It is the competitiveness, that drives people to see others as less deserving. Even to the extent, where some have very little or just about nothing at all to survive on.

In general I do not think captalism ever gives us more from less. It is human ingenuity, that gives us more from less. Capitalism simply taps into that and ultimately exploits it for the benefit of the few on the expense of the many. The fact that not all of what human ability to make more from less provides us goes into the treasure troves of the capitalist is just because it is impossible for the capitalist to hold all that they want, because they are few in number in comparrison to the rest of us. Holding credit for giving more from less is just a means to an end for capitalism to be able to run the hoax. In the end capitalism is just another pyramid hoax.

Well said. I can’t remember who pointed it out on another post, but I think it’s quite true that working class people don’t really have a nation as they can be exploited by rich people from any other nation. They are just sold the patriotism line to keep them in tow. The rich while giving the appearance of patriotism are far from it. The fact that Trump has Trump brand ties Made in China are a great example.

The problem I have is that “capitalism” means something different to a great many people. The problem I have is that the “profit motive” is not linked to human happiness or well-being. Consequently, capitalism needs to be regulated. For example, Sweden is a capitalist country which is well-regulated. The U.S., uh, not so much.

The problem is that the accumulation of wealth, which is unbridled in the U.S. version leads to corruption of the political system (always). No matter what legislative enactments are put in place to preserve stability, the rich will undermine those to get richer. Even culture is not always strong enough to withstand the greed at the heart of capitalism.

So, the question isn’t “Capitalism: yes or no?” But, how do we use our capitalist tendencies for the good of all?

Thoroughly agree with your points Steve. I think we should expect to have to adjust the dial if we are going to value capitalism. This isn’t a new concept either…it’s economics 101. During prosperous times you increase tax rates in order to prepare for the normal boom and bust economy that capitalism gives you. You decrease taxes in weaker economic times. Unfortunately we live in a society in which raising taxes is not possible and thus people get royally screwed when crashes happen, and those crashes are much bigger than they need be.

One might argue that countries like Sweden are maybe dialed a bit too far in the other direction. Instead of boom and bust many countries like Sweden avoid the roller coaster all together but this can just lead you into a slow decline, with little chance to change the trend.

It would seem the key is for a society to be flexible in regards to how it responds to change. It seems the general political mentality is that there is one right answer economically that works always.

People confuse different concepts all the time. Capitalism is frequently confused with commercialism and the market economy. It is also presented as an ideology, even though it is more of a descriptive, than prescriptive term. When one throws in liberty as a value to uphold, but does not bother to name whose liberty to do what, then liberty may become an excuse for one to exploit the other.

Lenin said that electricity is socialism. He referred to the idea, that socialism is all about progress and human wellbeing. I think, it is simply a misrepresentation of reality to claim, that capitalism is the best motivator for progress within human society. It may be the best any culture has to offer, but we could just as well defend feodalism by the same terms, that for a lot of cultures it was the best motivator for centuries to have any progress, even though we know it was an impediment of progress. Progress simply for the sake of progress is just stupid, because everything changes all the time. There is no static society, even though some societies are more prone to be conservative than others.

During the last hundred years, socialism was the major reason why capitalistically motivated societies moved towards socially more equal struktures. Henry Ford did not want to provide his workers with better pay, because he thought that capitalism should build a society with a well of stable middle-class as a some sort of moral goal, but because he recognized the danger of socialist revolution as a potential result of oppressing the workers.

Capitalism is a good motivator in a society, if the culture is that of competition, but it also creates a culture of competitiveness. This may in turn create an illusion of a society only developing for something better if people are in constant competition, or even that a state of constant competition is somehow a natural state of existance for human beings. In reality though, people become culturally ingrained and indoctrinated to compete with each other. The billionare capitalist does not compete to make the society any better, they compete on who has the most zeros in their bank account. If such a competition creates at times some “trickle down” benefits, it does not mean it is the best way to provide people with those.

We look at the former Soviet Union and think that it is an example of socialism (as opposed to capitalism) for failing, but how succesfull is the modern day Russia? Regardless of the economic system both can be regarded as authoritarian, conservative, militaristic and not very democratic states. Venezuelan catastrophy is being blamed on socialism, when in fact Finland is way more socialistic in structure and ownership, than Venezuela. Cuba has been socialistic and in an embargo for decades, and the general income is far less than in most western countries, but even so, it has lower infant mortality rates than the US. How do we measure success?

Thank you Rautakky for your excellent comments here. I think you’ve broken down capitalism pretty well. If I were to try to summarize the point that perhaps both you and I are converging on, I would say that capitalism is supposed to be a tool used by humans for the purpose of improving human well-being. But it should not be the only tool, and more importantly it is not meant to be a system that uses us. Today’s society feels more like we are the tool to capitalism.

I agree too that the way we measure prosperity is important. I feel that McAfee might not be using the best measures to gauge human prosperity, that’s not to say that his views might not give us some piece of the puzzle. But perhaps not all the puzzle. It’s probably fair to say, no matter how bad Soviet Communism might have been it probably did on average improve the lives of people from the days of the Czars. It’s probably also true to say that since the fall of communism there, lives, on average have improved. But that’s an average, and as you point out there are still a great many problems in Russia.

In school we were always taught that socialism and capitalism were an economic spectrum, and that totalitarianism and democracy were a political spectrum. Both those spectra and where you on them have impacts on a society. So when you say that the blame is incorrectly put on socialism you are completely right. The real problem is totalitarianism. A socialist dictatorship has far different outcomes than a socialist democracy. In debate here, you have liberals always pointing to Scandinavia, and conservatives always pointing to Venezuela. It’s the wrong conversation really. People also forget that Nazi Germany was highly capitalistic, despite what the political party called themselves. Workers were exploited heavily and factory owners made huge sums of money. Totalitarianism is what made it bad, because Hitler didn’t care about the assembly line worker for his war machinations, and so he let capitalism have a free rain to increase production as much as possible.

If I remember my education about Marx, he wasn’t completely against capitalism and even saw a place for it within a socialist framework. It seemed his argument against capitalism was what we are talking about here, is that in of itself capitalism espouses to human values, it just exploits human traits and by happenstance produces good results. Which is why I feel like when the end does justify the means we are off course.

Hope this note finds you well. I enjoyed this post, and I think agree with you in the large. I think you are arguing for some form of regulated capitalism, or mixed economy in which some elements of the economy more closely approximately “free market” conditions, with reasonable constraints on environmental and social impacts, while others that directly affect human well being, such as education and health care, should be more in line with the tenets of socialism. It seems to me that we are already headed in this direction, and that the difference between Sweden and the United States is where the balance is struck. But we are certainly far less libertarian in the United States than we were fifty or sixty years ago, and we have also in many ways implemented constraints on various sectors of the economy when it comes to environmental and social concerns. Some would argue we should go much further in these regards, and I agree, at least in the sense that there remain areas where we should being doing a better job of regulating, and not falling victim to the power structures of the elite, or to corruption.

But I do think we have to be thoughtful about this discussion. Your first two points of concern: that a more efficient use of resources (presumably non-renewable resources) is still consumption, and that global population is a problem, are hard for me to trace to the elements of capitalism I think you dislike. With regards to resource use, if there were ways to operate in a zero-consumption environment that met or exceeded our current standard of living, I think we would be doing this, wouldn’t we? So, there are perhaps three ways I can see to move from our current level of resource usage to a lower one: place incentives in the appropriate places and allow innovation to do its thing (regulated markets, where the regulations orient the direction of innovation); a government-mandated austerity program; or a change of heart in which human beings decouple from self-interest economically and create these changes without government intervention. Most people I talk to view the third notion as insane, and of the first two, I think a thoughtful, honest set of regulations to drive innovation in the direction we need to go, is probably a good thing. We’ve been extremely slow and late in doing this. This may be the fault of the influence of the wealthy and of the corporations, and probably is. But that’s the fault of human beings, not a system, right?

On the second point, I am not an expert on economics or social science, but I believe population growth is historically tied to those economies in which children are actually a resource to a family, such as less-developed economies where children provide relatively inexpensive labor to agrarian societies, or those in early stages of industrialization with less prohibitions on child labor. This is a bit cliched, so I welcome correction to this view. My point is that if you think capitalism is responsible for the problems of over-population, I’m honestly interested to know how. Certainly modern advancements in medicine and social services have reduced infant mortality and extended life expectancies, but wouldn’t we want these things generally? I mean, surely the answer isn’t to go back to losing tenfold as many children before the age of fifteen as we do now? I don’t think you said this was the answer either. But why is capitalism explicitly to blame?

The issue that always comes up for me in this conversation is this: is the system to blame for human failings? Unchecked capitalism is clearly problematic. Regulations written by the wealthy and the power brokers is problematic for obvious reasons. It would be ideal if the regulations that bounded and sculpted our capitalistic tendencies were crafted by persons out for the greater good rather than personal gain, and I think some of them are. And I think some of them are not. But I do think what we have is a reflection of the arithmetic mean of our society’s values, and so while many problems have occurred under the banner of capitalism, I also think our values are at the heart of it.

Also, I think what we know doesn’t work–at least with our current value structure–is a planned economy where a central authority determines how many of and how much of what goods and services should be produced, and by whom. I don’t think anyone–whether flying the current banner of capitalism or socialism–is in favor of such a system. But what this means is that capitalists and socialists are not arguing about the basic systems to deploy, but about where to draw the line on the sharing of wealth, the taxing and redistribution of gains, the protection of the environment, and other constraints on the so-called free markets. I’m for more thoughtful and better regulation. I’m for less corruption. I’m for a transformation in human values. And I’m for the rewarding of human ingenuity, risk-taking, and character. I don’t actually know what that makes me.

Hi Michael! I hope you are well also and thank you for your excellent comments here.

In regards to your question on my first point of concern, this comes from McAfee’s thesis in which he points out that we are decoupling from a one to one correlation between human prosperity and resource use. i.e. the amount of resources we are using aren’t increasing at the same rate as population. My point was simply that this doesn’t mean we won’t run out of stuff. I completely agree that we’d be using resources no matter what, and using non-renewable resources like fossil fuels, regardless of our economic system still have an endpoint. This decoupling that McAfee points out doesn’t mean that we can’t run out of a very important resource that is non-renewable even if we are using it as efficiently as possible. And from the point of you of emissions into the atmosphere it still may be that we are sending up more carbon than can be taken out. So the decoupling doesn’t necessarily give us a win.

In regards to population growth and capitalism, this also comes from McAfee’s data, in addition to other things I’ve read about population growth. There are certainly sub-complexities, but in a general sense food supply is the bigger driving force. Which is why populations grew very quick when people invented agriculture, and then again, hugely when we applied capitalism to things, not only agriculture, but also things that would increase sanitation like indoor plumbing. The assembly line if a fairly classic capitalist invention from my understanding of economic history, and it was a huge game changer in terms of the things it could produce en masse. Tractors being another good example once that technology became available. So the amount of food we were able to grow and the improvements to standard of living in terms of sanitation and hygiene were made possible by capitalism and this is why you see a huge rate in population growth with the industrial revolution as I indicated in my graph. In the modern era, the main thing that is reducing the amount of children people have isn’t a lack of resources, but more often access to birth control, even in poorer nations, the amount of children women have with access to birth control is close to half than without it. There are other factors too, and I think the ones you mentioned are part of the equation. But the correlation between capitalism efficiency at mass producing important things people need and increasing food supply and sanitary conditions is a fairly strong one.

With regards to your first point, I agree. Better may not cut it. I think this is where better regulation comes into play. As an aside, I was recently on a long car ride with some fellow engineers, and wondered aloud if Amazon was scourge to us from a carbon neutrality perspective or not? All those deliveries… Seems crazy. But without data, we found ourselves unable to determine if it was more carbon intensive for a bunch of shoppers to drive into town for all of those goods, or to have them delivered. At least some studies have shown that on-line shopping–which is beyond just Amazon, of course–resulted in about 35% less energy consumption as compared to shoppers driving individually to various retail stores.

What this doesn’t address, of course, is the purchase of all those goods to begin with! I get it. But it was interesting to me to realize that what seemed to be a problem was actually in some ways a gain. Anyway, your point on energy use is well-taken, and one of the failures of capitalism run amok.

On the second point, with regards to capitalism and population growth, I see the links, but it’s a difficult issue for me to wrestle with. I’m not sure mass production alone would have resulted in a population expansion, had it not also occurred concurrently with advances in sanitation and modern scientific medicine. To a point you made in your article, I have no idea how many advances would have occurred in a world without the advances in our standard of living that made it possible for so many people to innovate, invent, etc. Maybe computers wouldn’t have been invented without capitalism, and maybe they would have been, but we could certainly argue that if everyone were still busy in one form of labor or another, our collective intellectual output might have been reduced.

For me, innovation isn’t the problem. I can imagine, for instance, a world in which we actually do have more time as individuals for creative endeavors, etc. A world in which all our labor-saving innovations actually generate a pay-off to society at large, but it seems the rat race, so to speak, persists. A downside of capitalism that I see is the endless need to innovate to stay whole. I see this as a very profound issue, and one that is rising to the fore today. It just never ends. You either race to stay at or near the top, or you are left behind, and so while capitalism brings a higher standard of living, it is only according to its own metrics. I think you touched on this as well: what about happiness?

This is where I see the need for a shift in our basic values. At some point, we’ll have to say we have enough, or we’ll have to say we have enough for everyone to have a certain basic allowance. And we’ll have to say it’s a worthwhile societal goal to ensure people a basic standard of living without scrapping and wrestling for it in the markets. While I would love to see such a world come into being, it seems to me it isn’t a systems question alone, but one of what we value.

It’s a delicate dance between taking responsibility for one’s own life, and taking responsibility for all life.

I don’t think we disagree on much and I completely agree that it’s the technological advances themselves that lead us to realize the importance of sanitation and hygiene, and to develop tractors. I guess where capitalism comes into play is to be able to brings those to the population at an accelerated rate. The time it would have taken to make indoor plumbing a reality in many cities, even at that time would have been a slow process should there not have been competition among companies to make piping, sinks, faucets, toilets etc cheaper and faster. So it’s not to say that population wouldn’t grow, but it grew at a much faster rate, putting us in a situation where we were constantly having to keep up to service a rapidly expanding population. But I completely agree that it’s a multivariate correlation overall.

I agree with you that it should be the case that our motivations could be more altruistic. That a drive to make things better for people should be enough to develop the technologies and manufacture the goods we need to support our population. It’s a lot to keep track of in a complicated society and so maybe it’s better that we let people sort of take matters into their own hands, specialize and fill a certain role. But at the same time, companies can simply run out of control and that you have a problem. It does seem government is needed to tether these things to some centralized place.

It’s a delicate dance between taking responsibility for one’s own life, and taking responsibility for all life.

It’s interesting to me that the (apparent) focus of his argument is that technology allows us to do more with raw resources, but completely ignores the other big elephant in the room in relation to technological efficiency: labor.

The argument laid forth by McAfee seems to skirt the issue that as technology advances, not only can we physically build more with less raw material, but we can also do so with less human labor.

Automation (as I see it) is a huge threat to capitalism and is an issue that, to this point, has almost completely been ignored by most people who like to dissect and analyze economic systems. Artificial intelligence continues to develop, and at some point it’s going to be on par with or eclipse the efficiency of human labor.

What happens to capitalism at that point?

I never hear people like McAfee give specific details. It seems to me that the entire system starts to break down once human labor is no longer necessary. At that point, we only have a handful of choices:

1) we can outlaw certain forms of automation
2) we can give everyone a universal basic income
3) we can shift to a resource economy

2/3 of those options would no longer represent a form of capitalism, at least not as we know it. So that leaves the idea of banning certain forms of automation. But that in itself seems rather precarious for a multitude of reasons.

First, it would be very hard for businesses to automate themselves only up to a point. The profit incentives for the first companies will just be too strong.

But second, and more importantly in my opinion, is the ethical and philosophical ramifications of such a ban.

Once a resource economy becomes possible, I don’t really see the average person wanting to sustain the status quo. If given the option between a system where your needs are still met without the need for debt or physical labor, who would turn that down in order to maintain a system that trades most of their time and energy for currency?

Great points Ryan. I agree with you. This question actually did come up on the podcast. McAfee sort of answered it in a roundabout way. He is not a UBI fan, but does agree that provided someone is doing some sort of work they should be guaranteed some sort of basic income that affords them the opportunity to have social mobility. But of course this doesn’t address the issue of a future where there is nothing left to do. I mean of course there will be stuff to do, but does McAfee think this income is deserving if you decide you want to be a playwright, or a artist? Is the requirement for McAfee that it be some sort of manual labor? I keep thinking of that Black Mirror episode where people in the future are simply used to ride bikes to generate electricity in order to have their basic existence and build up reward points essentially to buy luxury items and experiences.

This is definitely something more candidates should be talking about, which is obviously why I enjoy Yang being part of the democratic ticket right now. But he hasn’t seemed to wake many of the other candidates up to this point in any significant way.

I am pleased that I got one my libertarian students who leans a little conservative to get excited about Yang and UBI. Once he discovered that a famous economist originated the idea he is super pro Yang now. LOL